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tv   Bloomberg Markets Asia  Bloomberg  December 7, 2016 9:00pm-10:01pm EST

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battles, saying his ousted chairman is no longer employed by the group. the session just starting there in jakarta, a rising feeling out there. yes, we have taken our cue from the positive lead. asian stocks rising for a third consecutive session, the regional index at a one-month high. australiang on stocks, up by 1.2 percent, weakness from the gold players, health stocks under pressure. having a solid session, up 1%. weaker yenng that you week course the market higher. the rally we saw in hong kong with the hang seng hitting that one week i am also -- one-week
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high, also continuing. some weakness from casino .4%, alsoalaxy down bell international down by 1%, so profit taking there. shanghai stronger, waiting for figures to come through, up by .3%. the bond market, we have seen bonds rally quite strongly ahead of the ecb meeting, a lot of expectation that mario draghi will continue to boost stimulus and keep that qe program going past march. the australian 10 year note, quite a bit of buying coming through. the australian yield on the 10 year down to 2.24%. the japanese 10 year, pretty
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flat, -.1% on the return for the five-year. things looking positive. we are waiting for that china trade data, but the map showing a lot of buying today. is due to release its latest trade numbers with analysts forecasting a slower decline in exports. tom mackenzie joins us now. that would be an optimistic sign, wouldn't it, but is it realistic? moderate improvement is what we are looking for. a full 5%st are for for november year on year in exports. compare to a drop of 7.3% in october, falling, but at back of rate, on the expansion in the manufacturing sector. a gauge from korea showing
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exports improving as well. role will be closely watched. cushion, but not much propulsion to export numbers. feeling there are pain from higher input prices, higher wages, and quite possibly as well some of the factories closed down in 2015 windy exports and the pressure on the sector was so bad. expectedof imports, we them to fall off 1.9% compared to 1.4% year on year in october. we will keep an i on crude, coal, and copper to gauge how much demand there is in china as infrastructure spending continues apace. rishaad: we have foreign-exchange reserves data spendingthey have been money to defend their currency or not allowing it to fall back to fast? tom: as you know, a gauge of the
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pressure on the yuan. we saw them fall off for november $70 billion, shrinking pile.x it is now just above $3 trillion in total. we have a chart that shows how reserve pilent fx has fallen, and it was $4 trillion in june of 2014, now around the $3 trillion, still the world's largest, but does indicate that some of these reserves are being spent to alongside theuan ramped up capital controls we have seen, and officials looking to january when the fx conversion quota kicks in. there is concern chinese citizens will take advantage of
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that in january, and the will be a rush to leave. one analyst said controlling out close -- outflows is to check the systemic risks in china, and top of priorities is to avoid market volatility. rishaad: thank you a lot for that. japan, an to
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unexpected cut in the third-quarter growth figure, coming in at an annualized 1.3%. miller from brett tokyo. this is a massive revision, 2.3 percent, they shaved one hold percentage point. how did they get it so wrong? >> they really did. japanese gdp figures are notoriously volatile, particularly revised figures. we saw a big change this time around. a lot of people were wrongfooted . the big expectation was business spending would have increased a lot and help to the economy. what we got was a decline in business spending, a surprise. if we look into the third quarter, the yen was looking quite strong, very different than today, and that was affecting business spending in
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terms of business sentiment and the way the futures for exp orts looked for japan. rishaad: tell me something here, we have a change in the estimate of the overall size of the japanese economy, which tells us better news there. tell us more. >> yes, when it comes to accounting, there is good news and we look at the way gdp is counted in japan, and now we have a new way of looking at research and development. it is an accounting change, but that change has made the economy as large as ¥540 trillion in the blink of an eye, that is good news for shinzo abe and his goal of getting a 600 trillion economy, but it does not do anything for the growth rate, and that's what we saw in the news today from a revision downward in the growth rate. rishaad: right, what can we expect next from the japanese economy? it is key to get a look at how business sentiment really is. we get a little more information next week from the boj when it releases a survey where we get to see how manufacturers see the economy and the fourth quarter, how non-manufacturers, large businesses, small businesses, so more granular detail on how businesses see the economy at the moment. we have the boj meeting later in the month, and then what is important will be the budget from the japanese government, and we get a look at how fiscal spending will pan out for the next year. rishaad: thank you very much. brad miller joining us with the latest on that, japanese figures from, growth figures, huge revision of one percentage
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point. let's get to first word news. russia has agreed to sell its stake in its largest in what is the country's biggest ever privatization. the buyers will pay a $11.3 billion for 19.5% and the company, taking equal shares. russia is privatizing state assets to raise cash after the collapse in oil prices. governor says inflation rates are low enough to return to his goal. the cash rate is likely to remain at 1.3% for some time, and recent developments do not cause him to change that view. brian cost seven times. korean lawmakers expected to introduce a motion to impeach before parliament
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decides her fate. the document accuses her of bribery, abuse of power, and violation of her duties. it will be brought before the national assembly to allow a vote on friday. park geun-hye has apologized for the scandal and says she will accept the recommendation. president-elect donald trump's time magazine's person of the year, something he says is an honor. the editor said the choice was straightforward in that he is the person who has had the greatest influence on events in 2016. time said trump defied expectations and broke the rules and defeated to bring parties to win despite odds of 100 to one against when he entered the campaign. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: still to come, hsbc's take on the latest china trade
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data. those numbers,g and what do they mean for policymakers? announceb prepares to its latest decision, why markets are expecting to see further stimulus action. ♪
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quick check of the latest business flash headlines, china mobile and alibaba to expand there are lines in the face of competition, looking for opportunities in cloud computing the internet of things. collaboratedeady on e-commerce, mobile payments, and i.t. infrastructure. by do will help digital advertising and facial recognition that stores. seek a says it will
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criminal investigation into some facetives, volkswagen must action against audi vw korea current and former executives. jet airways is set to be taking $300 million in new funding to pay for expansion on international routes. airlinesecond-biggest started talks with potential lenders and may sell stock at a premium to its current price. and a high debt load contriving to restrict the carrier's ability to expand, market share drop back as well. gear,nomy stuck in low inflation far from target, and that's why markets expect the ecb to keep stimulus coming when they meet today. from marioate cuts draghi, certainly, since he
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can't really do that, but it is bond buying, isn't it? are nearour rates zero, what are you going to do? , continuingbonds the program that started in march 2013. it is $80 billion a month now. the consensus is now they will expand the time they will do it, six more months past that march 2017 time when it was supposed to stop. why did the ecb keep going? stories about the possible hint of tapering. here is why, inflation is still weak. 4442, the yellow line is the 2% target. inflationline shows rising 0.6% year-over-year, far from the target. forecast previously the ecb
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was 1.2%, 28 teen, 1.6%. our bloomberg intelligence team says when they are looking at the economy, they will have a forecast that is weaker for inflation than the ones they have here. rishaad: tell me something, ecb will updating its economic forecast as well. what do we know about that so far? >> bloomberg intelligence saying not too much change. in the third quarter, area gdp year,3%, 1.2% year over maybe they will be looking at something like 0.4% in the fourth quarter. withight be surprised that surprises politically that they're not be more cautious on gdp, but here is what they are suggesting. dentt has not made a big
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in the u.k. or european economies as people thought it might. trump's election has led to rising bond yields, but not such a big hit yet, and even though t in the u.k. or european economies as people thought it might. italy has upset the political applecart by voting no, there is a long way between that and something as drastic as leaving the euro area. when you step back, nyu economics professor michael is looking at the very existence of the euro area. zone is a flawed construction. it is very difficult to restart growth in the south, and so you go for a long. ng time and the support for the people who say this does not work starts to rise, and down the road you have a potential unwinding of the euro experiment. >> perhaps this is one reason
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expected tois not taper. when you hear him say something i mario draghi, i have a lot of weight on my shoulders to hold this euro area together to create more growth and not to stop stimulating too soon. if it does extend this program by 3-6 months is there a risk of eligible bonds to buy? >> it is one thing to extend the time you will buy bonds and buy more. it is another thing to deliver when key parts of the yield curve when they are still at zero or negative rates. we are expected to see at the end of that meeting hours from now that they have tweet some of aked some of twe the rules to buy more bonds. if you're a bond trader, you
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want to see what they say there. rishaad: kathleen hays joining us from new york. the lawmakers have grilled bosses of at&t and time warner about their proposed $85 billion merger and whether it would benefit consumers. they are trying to find out if donald trump is still against the deal saying that he would block it. su keenan examined this in new york for us. >> key questions, will the merger benefit consumers or will it create anti-trust concerns where rival distributors of content are harmed? one senators said we have seen the movie before, robust competition collapses. we end up with monopolies, and the ceos said that's not going to happen here. >> the benefits of combining at&t's distribution with the world-class content of time warner, and for your constituents, we believe the benefits are straightforward and
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substantial. they will get more choices and lower-priced options, and that means more nationwide competition against the cable companies in each of your respective states. at&t stock since the deal didn't come but has rebounded considerately if lawmakers asked if a big at&t stock since the md engage in bowling tactics. the answer was no. offer ourere to not networks over any of that cable, satellite, telco, or over-the-top platforms that old now the place where increasing numbers of americans are choosing which when to get their tv service through, we would be cutting off meaningful revenue for our company. there is no incentive for us to do that. >> during the campaign, trump voiced his objection, talking about too much power in the hands of too few companies, and express rancor at cnn.
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presidents typically don't weigh in on more jurors, nor does the senate judiciary committee, which rather guides the regulatory commission. take a listen to what the chairman had to say. >> there is concern this acquisition will concentrate too much power and to one conglomerate, resulting in higher prices and fewer programming options for consumers. there is also concern about the merger's implication for a free and diverse media. on the bloomberg, despite the premiumncerns, for the deal has come down. in other words, the likelihood investors see the deal falling apart is less than it was a few weeks ago. up, the indian billionaire tata has broken his silence over the dismissal of
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mistry. find out what he had to say. ♪
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patriarch hasata turned up the heat on his ousted , asking, ratan tata shareholders to support the removal of cyrus mistry. this has really gotten nasty. and ratan tata silent until now. >> we have seen both sides exchanged tirades against one another. saying their side of the story. rishaad: and leaking of course. >> there was a letter asking for shareholder support to remove cyrus mistry.
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he was the mode it, logically he should have stepped down. is the overall parent company, and you have all these companies listed separately. sons is the primary net-net, he is asking for support to get rid of the guy. as ays he has continued disruptive influence on these boards, which can make the inpany dysfunctional, particular open hostility to the family. this is not the kind of language one should expect from ratan tata. rishaad: do we know what triggered this? >> your guess is as good as
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mine. it is only conjecture, interference with insider day-to-day affairs. ratan tata says that cyrus mistry has been acting against tata culture and so on. families that are have known each other for generations. an 18% stake.owns this is a 147 year old company. these are not decisions made overnight. this not bode well for the tata group. rishaad: would we know about the interim chairman and what is he saying about all of this? himself is in charge. thatbelieve ratan tata
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they will be focusing on new leadership. we don't know who the new leader will be. we will have to wait and watch and see who the successor will likely be. rishaad: thank you very much. great stuff with this boardroom battle taking place in india with tata sons. equities reaching record highs, playing out when it comes to the asia-pacific, benchmarks from tokyo to sydney moving to the upside, extending these gains. we also have a bit more pressure when it comes to the bond markets with yields a declining, this is the head of policy updates from two of the world's biggest central banks, chiefly the european central bank there. tell you about
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australia, the latest trade data disappointing. we have a deficit growing instead of shrinking. who is to blame? we will be having a look at that and much much more when we return. ♪
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>> it is about 10:30 a.m. in hong kong. i am sophie kamaruddin. japan cut its reading of the growth to 1.3%, down from a measure of 2.3%. the drop blamed on falls in capital spending and private inventories. this was the first time japan has used a new method to calculate gdp, hoping to bring closer to his goal of 600 trillion yen. china's foreign exchange reserves fell as officials try to shore up the yuan, the fifth straight decline and comes amid tightening of capital controls.
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china's reserves has fallen by $1 trillion. the ecb is not expected to make any change in its final rate call of the year. expecting an extension of qt to sustained recovery. it is thought mario draghi will choose to prolong asset purchases at the rate of 80 months.euros for six the ecb will update its forecast for growth and inflation -- airbnb admits that it softens its approach to regulators. the move comes as airbnb inches into the indoor must chinese market. -- enormousr miss
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chinese market. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: getting you to the market action, just having that break. yes, tokyo going in on that lunch break, positive as someen weakens, up .8%, very strong buying coming through, particularly tokyo electric power, one of the best performers in the region. i want to show you the australian market, rallying very strongly for a second consecutive session despite disappointing data we had. october trade data coming out yesterday -- today, i should say, but yesterday's data disappointing, but solid buying coming through. up .9%, andg is flat movement on the shanghai
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southeast asia markets looking pretty solid today. ,ome movers we are watching samsung sdi firmer after reaching a battery deal. that wille company supply those batteries for the galaxy note seven, which was causing some devices to catch fire. onyo electric power going that lunch break, up by almost 13%, a six-month high, and reports out of the nikkei of a loan increased that could help balanced books. this is the company that owns dreamworld that had that fatal accident, rising 6% with the reopening of its theme park. elsewhere, the bond market, we are seeing a significant rally at head of the ecb meeting.
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the expectation that we are likely to see mario boost intoinue to that bond buying program pass the march deadline. have a look at 10 year bond yields on the australian 10 year note, down 2.7% there, bonds in favor. in japan, flat movement on the 10-year note. dollar: the australian the two moved on worse than expected october trade data released a couple of hours ago. let's go through the numbers. paul allen is hidden sydney. more weakness there off that terrible gdp yesterday. trade deficit 1.5 $4 billion, worse than the 610 deficit that was expected, and , revised.eptember
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imports were up 2%, exports up 1%, but this happened when the iron ore price was beginning to recover to the mid-60's. revenue from metal or was down by $100 million, coal was $240 million, but less than the $700 million expected. capital economics put out a note saying this is concerning because net exports may be a drag on gdp growth in the fourth quarter. we just had a negative read for the third quarter, so two consecutive quarters of contraction is the technical definition of a recession, a good long while since we have had one of those in australia. on the upside, the import number, some analysts pointing to a sharp left in capital goods, the potential to feed through stronger business investment numbers, but commodity prices are rising and demand from china is growing, so
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there is some hope out there that the third-quarter gdp figures were a one-off. rishaad: that is paul allen in sydney. president-elect trump getting his man for china, terry branstad excepted -- accepted the offer to be yuan invested are in beijing. nations ambassador to beijing. before that, you had jon huntsman, gary locke after jon formern, sandy rand, a fraternity brother of george w. bush, gary locke, former commerce secretary, washington state governor, and jon huntsman , going on to run for president, characters, asnt
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is terry branstad, who is touted as a friend of china, the chinese foreign ministry saying he is an old friend of the chinese people because of his ties to xi jinping. in2012, he hosted xi jinping a state visit to the nine at states, went to des moines, iowa. it is interesting, how is wall street going to be looking at this and money managers question mark here is a glimpse of that. oriental concept is magic, but they can out wait you for a century. somebody who understands the program and has the stature and the prestige of the office, i think it's a brilliant move. i think it will be terrific. >> brand stand is the longest-serving governor in history from iowa, and iowa not surprisingly sees china as a big opportunity.
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exports the number two for iowa products, namely soybean and corn. andaad: if terry branstad is trump's good cop, you are telling me about some of the ideas of who could be bad cop here. >> trump is putting himself out as the bad cop, at least through his tweets, claiming he will name china a currency manipulator on day one and impose those tariffs on imports into the united states. you have to look at who will be the secretary of state. butight be jon huntsman, you also have to look at treasuries secretary elect if you will, the nominee stephen that lies in the lap of the treasury. rishaad: he said he would do that on day one of his presidency. him to do it. he will also oversee the
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committee on foreign investment into the united states, the hawks in washington want the nine it states and washington to investmenton chinese into the united states, reviewing the strategic investments. we have a chart. you can see chinese deals, there are more chinese investments in the united states this last year than u.s. into china. there is the tipping point. 2015, $15.3 billion in overtaking u.s. flows into china. muchad: thank you very indeed. right, still ahead, unpacking the latest trade data out of china, hsbc's insights on this. you're watching bloomberg. ♪
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rishaad: we are back.
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this has turned out better than was expected, but can the positive trend continue into next year. let's bring in julia wang. we are waiting for this trade data. what are you looking for in that data? think that when you look at , fairlyand imports modest contraction. i think we're looking for the pace of contraction to be somewhat smaller, but nonetheless a bad year for exports. step the market thinks about is what this means for the currency, and the fixings came out today. it has been that they cfo's of the market over the past month and has continued to edge up, become weaker. rishaad: today was a stronger fixing, but -- >> yeah, so, it has been
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stronger than expected for a couple of days. i think they are trying to manage the pace of weakness in the currency, but the broader data that comes out today and , people and next week will generally focus more on what this means for policy, and the bigger question on policy is not necessarily monetary or fiscal, but the exchange rates. rishaad: we have the export picture, that's telling us more about the global economy. a function of weak global demand, the primary orts werey exp quite weak. over the past 12 months, it has weakened more against the dollar, and people are expecting it to weaken more against the dollar. if it does not pick up, people
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will say does that mean that the currency has weakened or will weaken more next year, that there is no in the game in this? rishaad: what are your foreign exchange strategist suggesting? 7.3 possibly next year? for 7.2, butking people have been saying there are important psychological levels in the currency for a couple of years now, and it of someery number is psychological importance, but the bigger point is not to levels,ver the numeric but more to think about the fundamentals in the sense that, while chinese policymakers can't control the external environment, what are the levers they can pull domestically to reversed trend rallies and
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encourage expectations, so that leads us to the growth cycle in china, the biggest push factor when it comes to taking money out of the country or looking for bigger depreciation, so they can't control how strong the dollar gets, how much reflation the usa economy gets, but the only thing they can control is the domestic growth cycle, so that is the ultimate factor. extent, they do have some levers they can pull internationally. course, tpp looking all but dead at the moment. .e have rcep in the frame i think you've done report saying this is the time for asia chance to step into trade, especially china to step into the u.s. where it's leaving a vacuum. vacuum, but is not being handed over on a silver platter. get thes to do a lot to
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trade deal signed. there is still work it needs to do, and to reap the benefits of the trade deals, economy still have to be more open, so there is a vacuum, but it's not being handed to china on a silver platter. if they do pull through, there will be delays before the economic benefits start to show up, so it is a medium-term positive for china and the it is notwell, but something that can bring immediate economic benefits. now, we had these pmi numbers the other day, and i'm just going back to the domestic economy there, which seemed to be portraying this picture of the rust belt powering the economy. it is still being powered by investment. the movement to services is going slowly. pmi'sta, retail sales,
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are showing china's economy is being led by the previous an old leaders. are slightly more constructive this year compared with last year. we have seen a turn and the cyclical data points come a prices have rebounded, corporate profits are improving, and next year profit and improvement will find its way into private sector investment, so i'm looking for the private sector to do a little bit better next year. you are right, it was all started with fiscal stimulus, but we are more constructive and thinking that with the help of fiscal stimulus, this can turn into a broad-based recovery next year. rishaad: you have five macro themes next year. what are they? >> the biggest is reflation, prices continue to recover, corporate profits.
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for the fiscal and paul's to remain strong, infrastructure still a big pillar for growth. we are looking for the slowdown in the housing market to be more manageable than people are fearing at the moment. we think tightening measures are quite selective an impact on growth will be ok. our base case, were not assuming a trade war will happen. a lot is still uncertain, but were looking at more trade disputes, more trade tension, but not a trade war in a base case. lot more, i think a focus on trade next year. lastly, were looking for a faster pace of soa reforms, shutting down companies. rishaad: how much evidence that we had of that so far? >> i think this year, the
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beginning of the year slow, lagging expectations, and past summer, things have started to speed up quickly, so that's when prices started to rebound and domestic ppi rebounding. given preparation work this year, they have a chance, but the reality is that it is a policy driven deleveraging process, and it will be bumpy and uneven. rishaad: they keep on saying that, don't they? >> everything policy driven, not market-based. it depends on when people get their attention on the things to be done. whole, i think we will make more progress next year. rishaad: thank you so much for joining us. julia weighing from hsbc. u.s. benchmarks jumping the most in a month, setting fresh records and speculation the ecb
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will extend its asset buying program, the s&p and dow climbing to all-time highs. oil dropped back below $50 in new york. that sparked a retreat into industrial metals, gold and the yen on the up, and some investors remain cautious. the night they knocked it down i thousand points, i went and bought stock that night. i thought that was crazy. i think now the markets are ahead of themselves. so i'm not going to sit run out and buy stocks today because i think it has run a little ahead of where it may be should be. rishaad: the philippine president says donald trump wants what he calls had relations with the united states fixed when he takes office. by ties have been strained the philippines pivot to china and russia and he has called for american forces to leave.
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bridges withilt the trump came after falling out with the obama administration. we should fix are bad relations. we just said something good here. , noyou are doing great media supported me. i did it on my own. that is why i am very impressed with you, mr. president. rishaad: coming up, all bets are off, why macau's chief gaming regulator is full of new year cheer? ♪
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rishaad: i am rishaad salamat. this is "bloomberg markets: asia." italy's outlook has been cut by moody's. it also says it sees only "slow and halting progress" when it comes to reform. renzi wavering on resigning following his referendum decision.
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abbott labs sues to end alere deal. there have been delayed earnings reports and bribery probes. for early access to movies, bolstering the company's itunes business. 20th century fox, universal, and warner bros. are looking to offer high priced home video rentals as soon as two weeks after they open in cinemas. we have bloomberg markets iditinuing, angie and ha updating people. a jampacked show. haidi: we take you from hong kong, annoy, beijing, and back again, but we focus to start on
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ecb, what investors are waiting for, and how will mariota drug a address d at time and referendum that went south. zone, weuture of your will ask how asia might experience any fallout. ton of course, we talk nissan. asia's fast-growing emerging markets have proved elusive for japan. that and a whole lot more, coming up in the next hour on "bloomberg markets: asia". rishaad: right, well, let's have a look at macau's casinos. they seem to be on the road to recovery after a 26-month-long losing streak. hub is starting to see healthy and sustainable growth. a turnaround in the making.
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fortunes change in giving a shift in market and stricter rules by regulators seem to be paying off. this cap for straight months of gains. when it comes to 2017, the director of the industry watchdog is hopeful the momentum will continue. healthy, sustainable growth is the main message. macau's government forecast $25 billion in gaming revenue next year. they don't want to tempt fate, do they, so they say they are cautiously optimistic? they certainly want to be conservative given external factors. is this attempt to diversify the economy, and here's what china had to say about the trump factor. of a veryicies
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important country in the world can affect the macro economy, so it won't affect directly the gaming industry of macau, but if the policies affect the general clients may beur affected, so it is also a factor for the development of the gaming industry of macau. with these factors, china is expecting more of the same in 2017 when it comes to policy priorities, some perhaps more regulations will be implemented. rishaad: sophie kamaruddin there with a more bullish macau out there. casino related stocks on the up in the hong kong session. "bloomberg markets: asia" continues after this. ♪
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♪ announcer: from our studios in new york city, this is charlie rose. charlie: fareed zakaria is here, he's a columnist for the "washington post" and hosts the cnn program, fareed zakaria gps. he has the special on barack obama that premieres december 7 on cnn. fareed: barack obama's america was born with hope. >> people work crying in the streets. fareed: with history and with crisis.


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